Which IRA custodian should I use?
CrowdStreet is agnostic as to which IRA custodian you invest through. Before you make your decision, you will want to confirm that the provider you choose offers custody of alternative investments, such as the private equity commercial real estate offerings available on the CrowdStreet marketplace.
Our platform has built out online integrations with Millennium Trust, Entrust, and Equity Trust, which eases some of the operational burden of the required paperwork.
How do I set up my IRA account on the CrowdStreet portal?
When you create your investing entity in our online workflow, you’ll want to be certain to use the correct name for your account, as provided by your IRA custodian (this would often take the form of “Custodian IRA FBO First Last Acct#”), and select “Individual” as your account type. For more detailed instructions on how to create your investing entity, please see this article.
What is the process for completing an investment through my self-directed IRA account?
Each IRA custodian’s process differs slightly from the next. Some custodians allow the investor to execute closing documents, while others will require that they sign on behalf of the investor. Some custodians require the offering’s sponsor to countersign closing documents before releasing funds, while others are satisfied to file completed documents after the investment is funded and finalized. Some custodians need extensive supporting documentation such as articles of incorporation, certificate of good standing, etc. The bottom line here is that, if you can gain a clear understanding of what your custodian requires, our investor relations team is ready to help facilitate the process and coordinate communication with the sponsor team as needed.
Are there any tax consideration to using my self-directed IRA to invest in private equity commercial real estate (CRE) offerings?
Most CRE offerings will result in unrelated business taxable income (UBTI) for tax-exempt entities such as self-directed IRA accounts. It is recommended to connect directly with the sponsor of each prospective investment to assess whether this offering would cause the IRA account to have to file a tax return and pay tax on UBTI. You should also consult your accountant or tax advisor regarding the consequences of UBTI on an IRA account. We have prepared this article to educate investors on the subject of UBTI and outline the questions that should be asked to help make the determination as to whether a prospective investment would be better held individually or through the IRA.